Gee, this sounds familiar.

It would be cool 'cause they could have the iTV built in

I wouldn't be surprised if it is true. I've been saying this for a while now.

I think Jobs sees reality... that TVs are just big monitors... so this makes sense.
iTV will have a cable receiver and Tivo-like software (if they don't just buy Tivo) and a hardrive.
...iTunes music plays on your 5.1 TV system, if you wish, and movies from your hard drive wirelessly.

The iMac may get an iTV update so college kids have just one screen!
It's all rather obvious that HDTV is just a computer monitor anyway.
But Jobs will keep it all Mac-centric - using iTunes to connect it all, as with the iPod/Nano/Shuffle.
The phone will be "a la carte" too... load into it what you need that day.
Keep it simple!

I sure hope we some larger 1920 x 1200 Cinema Displays; ViewSonic has announced a 28-incher for $879 with a plethora of inputs including HDMI.

Hehe, I was thinking cinema when I read this...

What was the address of that shop?

I still don't see the advantage of selling the big display themselves. The big screen market is pretty cut throat - unless they can come up with some wacky new display technology, or some way of undercutting everyone else, there's no real market to be had here.

OTOH, an add-on iTV box that works with any screen out there, *that* would be a big hit, IMO.

I mean, maybe they'll pull it off, but my nose says no.